Quotes from Sebastian Mallaby

Years later, (Paul) Jones described the mental gymnastics that went into writing these scripts. Every evening I would close my eyes in a quiet place in my apartment ... I would visualize the opening and walk myself through the day and imagine the different emotional states the market would go through... Then when you get there, you are ready for it. You have been there before. You are in a mental state to take advantage of emotional extremes because you have already lived through them.

He read Adam Smith, Thomas Hobbes, and Niccolò Machiavelli.

All new markets are inefficient at first

He commuted to his Canadian office in a Ferrari, though sometimes snowy conditions forced him to use Bentley.

Capitalism works only when institutions are forced to absorb the consequences of the risks that they take on.

Investors who focus on currencies, bonds, and stock markets generally assume a normal distribution of price changes: values jiggle up and down, but extreme moves are unusual. Of course, extreme moves are possible, as financial crashes show. But between 1985 and 2015, the S&P 500 stock index budged less than 3 percent from its starting point on 7,663 out of 7,817 days; in other words, for fully 98 percent of the time, the market is remarkably stable.

Accel's culture of training and trusting young investors seemed to hold the secret of success.

The great thing about alpha was that it could be explained:

Edward Crosby Johnson II, who in the 1950s established Fidelity as a dominant investment firm and made the same point in his own way: "The market is like a beautiful woman—endlessly fascinating, endlessly complex, always changing, always mystifying. I have been absorbed and immersed since 1924 and I know this is no science. It is an art…. It is personal intuition.

success had bred confidence; confidence had blurred into complacency; complacency had caused human beings to behave awfully.

Because they mark all their assets to market and live in constant fear of margin calls from their brokers, hedge funds generally monitor risk better and recognize setbacks faster than rivals:

Recalling the atmosphere of this period, Mark Pincus remarked, "There were about six people that I knew who were interested in doing anything in the consumer internet, and we all kind of went to the same two coffee shops.

Tom Perkins's dictums: you succeed in venture capital by backing the right deals, not by haggling over valuations.

Do not suffer your good nature . . . to say yes when you ought to say no

Let specialists obsess about minutiae. Soros's motto was "Invest first, investigate later.

Only a fraction of 1 percent of firms in the United States receive venture backing.[34] But in a study covering the quarter century from 1995 to 2019, Josh Lerner and Ramana Nanda find that VC-backed companies accounted for fully 47 percent of U.S. nonfinancial IPOs;

Horsley Bridge is an investment company with stakes in venture funds that backed 7,000 startups between 1985 and 2014.

Thus, even though VC-backed firms accounted for 47 percent of IPOs, they accounted for 76 percent of the market value at the end of the study. They also accounted for fully 89 percent of R&D spending.[35

The six other members of the Traitorous Eight bought shares, and Robert Noyce saw to it that his small alma mater, Grinnell College, was invited to participate.

In a famous essay in Esquire, the master storyteller Tom Wolfe presents Robert Noyce, the charismatic leader of Fairchild's eight traitors, as the father of Silicon Valley.[51] Noyce came from a family of Congregational ministers in Grinnell, Iowa, the very middle of the Midwest, where the land was as flat as the social structure. When Noyce moved out to California, he brought Grinnell with him, "as though sewn into the lining of his coat.

For politicians who worry about technology's geopolitical impact, it's tempting to get the government directly involved in subsidizing venture capital. But this is a mistake. In most cases, four simple steps will pay off more. Encourage limited partnerships. Encourage stock options. Invest in scientific education and research. Think globally.

Council members Nick Beim, Steve Denning, and Auren Hoffman helped with early Silicon Valley introductions.

In 1994, the Federal Reserve announced a tiny one-quarter-of-a-percentage-point rise in short-term interest rates, and the bond market went into a mad spin; leveraged hedge funds had been wrong-footed by the move, and they began dumping positions furiously.

Hedge funds built their strategies on short selling, but governments imposed clumsy restrictions on shorting amid the post-Lehman panic.